Gold demand subdued on bank holiday, flat prices

MUMBAI (Reuters) - Gold demand in India, the world’s biggest buyer of the metal, was subdued on Tuesday as banks were closed and prices were barely changed.

A Hindu married woman wears gold bangles at a jewellery shop on the eve of Teej festival in Allahabad September 1, 2008. REUTERS/Jitendra Prakash/Files

As of 3:22 p.m., the most active gold contract for April delivery on the Multi Commodity Exchange (MCX) was 0.02 percent higher at 30,181 rupees per 10 grams.

“Prices are steady. If they fall below the 30,000 rupees level, we can see higher demand, especially from jewellers,” said an official with a Mumbai-based jewellery exports firm.

India’s domestic bond and currency markets are closed on Tuesday for a banking holiday.

The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

In overseas markets, gold rose for a second straight session on Tuesday, buoyed by strong physical buying in Asia after traders in China returned from a week-long break.

India’s government may further raise import duties on gold or put a cap on purchases in a bid to rein in the current account deficit in the 2013/14 budget, an official with the biggest state-run gold importer MMTC said.

The silver contract for March delivery on the MCX was 0.07 percent higher at 56,255 rupees per kg.